Highlands will receive a $506,759 refund due to an overcollection in rates for 2020 and other components that Duke deems to be confidential.
During last Thursday’s regularly scheduled Highlands Town Board of Commissioner’s meeting, the commissioners heard an update on Duke Energy from the town’s energy consultant, Kevin O’Donnell with Nova Energy Consultants.
O’Donnell started the update stating that the town would receive a $506,759 refund due to an overcollection in rates for 2020 and other components that Duke deems to be confidential.
“We also received $360,000 in refunds and again, Duke considers those items to be confidential,” O’Donnell said. “Our municipal/university group consists of Western Carolina University and several other municipalities including Dallas and every year, we conduct an audit of Duke’s rate formula to make sure that there is nothing going on. Every year, we have disagreements. We challenged some of their positions and ultimately, we agreed to a settlement in regard to some previous audits and our rates are down $40,000 per year because of that.”
O’Donnell requested that the town save the money and use it as a rate stabilization fund.
“When it comes to coal ash, although the NC Supreme Court remanded the case to the NC utilities commission, Duke and the Public Staff settled the case and refunds were sent out. We are still going to have to pay coal ash as we move forward,” O’Donnell said.
The Town of Highlands has a contract with Duke until 2028, but O’Donnell expects the rates to increase two to three percent per year until 2027.
“We will start looking for alternatives in 2024,” O’Donnell said. “Going over the course of the year, natural gas is going to be pretty tight this year because of the lack of drilling. So, we are going to see a spike in our commodity price this winter. Since Duke uses a tremendous amount of natural gas, and is going to use even more going forward, we are going to see a spike in the commodity price.”
Some wildcards in the industry that O’Donnell brought up to the board are carbon tax, legislative mandates, the regional transmission organization and competition in retail markets.
“I have heard a lot of people talking about a carbon tax and there was an article in the Wall Street Journal talking about legislative mandates, where if a low serving entity such as the Town of Highlands did not start increasing their clean energy by four percent per year then there would be a reassessment to the tune of $150,000 per megawatt per hour,” O’Donnell said. “That is a massive penalty. It looks like the folks in Washington are beginning to realize that may not be possible with people and are beginning to backtrack a little. I am obviously in support of RTO’s. That would mean that we would have a single rate and can buy power from states like Virginia, and Maryland and Georgia, who would be in the same RTO. Retail competition is a good thing and means that we could buy cleaner power, if that is something you would want to do.”
Going forward, O’Donnell said things are looking good for the Town of Highlands.
“We’ve got some refunds coming in because we have overpaid in the past,” O’Donnell said. “We are continuing to get on top of the wholesale rate formula.”
- By Christopher Smith